Facts About Poverty in Nepal: Struggle and Progress

SEATTLE — Nepal is surrounded by two of Asia’s growing giants, India and China, and yet remains dwarfed by them economically. These facts about poverty in Nepal illustrate the different ways in which its people are affected by poverty.

Facts About Poverty in Nepal

Nepal is the fourth poorest country in Asia, with a GDP per capita of merely $2,573. This explains why 25 percent of Nepalis live below the poverty line in Nepal, which amounts to ₨19,261 per year for every person, according to the Central Bureau of Statistics. This is around $225, meaning anyone who earns above $0.60 per day is above the poverty line and thus not considered “poor” in a Nepali context. This is far below the World Bank’s poverty line of $1.25 a day.

The second of the facts about poverty in Nepal is that contrary to popular assumptions about urban poverty decreasing at the highest rate when a country develops, poverty in Nepal increased by 5.46 percentage points in 2010-11 compared to 2003-04. This complicates the government’s attempts to reduce poverty, as many of those who live in urban areas are involved in the informal sector of the economy, making it extremely difficult to provide them with social security.

The country has experienced a long spell of political instability which hindered economic progress, such as the civil war between the government and insurgent Maoist rebels from 1994 to 2006. The war finally ended in November 2006, when Prime Minister Koirala and Maoist leader Prachanda signed a peace deal, with casualties of around 13,000. In 2008, economic growth was also disrupted by protests by the hill tribes.

Nepal is heavily affected by natural disasters, such as the 2015 earthquake which affected not only infrastructure but also homes and economic growth. The effects of the earthquake were exacerbated by Nepal’s existing problems, such as persistent power shortages and underdevelopment of roads and transportation infrastructure. Fortunately, the earthquake triggered a swift international response to the crisis. Seventeen countries sent not only monetary aid but also military troops to aid the search and rescue efforts.

Four-fifths of Nepal’s population still lives in rural areas, making it a largely agricultural economy. In 2017, agriculture made up 27 percent of the Himalayan country’s GDP, while services made up 51.5 percent, yet only 19 percent of the population is engaged in the service sector and 69 percent in agriculture.

In 2017, Nepal experienced an economic growth rate of 7.5 percent in addition to producing 5.2 million tons of rice, the most ever recorded. This saw a marked reduction in poverty in Nepal as inflation rates were stabilized, helped by the significant amount of remittances sent by Nepali foreign workers.

Education was traditionally restricted to members of the upper classes until 1951. Following this change, the Nepali government began expanding the development and reach of education in order to reduce poverty in Nepal. However, private education was introduced to Nepal, which widened the gap between rich and poor children. Poor children still have low rates of access to education, and one in four of the poorest children do not attend school.

Poverty in Nepal is also geographically segregated. Nepal is divided into three geographical regions; mountain, hill and Terai. The mountain region is rugged and the land is not conducive to agricultural activities. Due to this, the 42.27 of the local population lives in extreme poverty. This figure is 17 points higher than the national average.

The caste system has a symbiotic relationship to poverty in Nepal. The Muslim and low-caste populations are among the poorest in the country. The Musahar community is a Hindu scheduled caste largely considered to be “untouchable”, and has the lowest education and literacy rates in the country. To reduce this, the government established a school in the community, but failed to follow through with high-quality teachers and sustained efforts.

Poverty in Nepal is worsened by the fact that women are generally left illiterate. Only 5 percent of Nepali households with at least one girl or woman with education at grade 11 or higher are below the poverty line. Nonetheless, women’s education only has an impact on poverty if she has received an education above grade 5 and is not merely literate.

The issues contributing to these facts about poverty in Nepal are many, but progress is being made as well. The country’s poverty rate has seen significant improvement over the past two decades, and recent economic successes should continue that trend, leading to better quality of life for more and more Nepalis.